Trust and assurance of cooperation in ongoing relations: An experimental study using the prisoner's dilemma with variable dependence

Abstract

Two experiments using the "Prisoner's Dilemma with Variable Dependence" with a total of 70 subjects are reported. The cooperation rate was extremely high (95.1%) while the game was being repeated, but only half of the subjects cooperated in the final game. This suggests that cooperation in ongoing relations is supported by the "shadow of the future" (Axelrod, 1984). Nonetheless, most subjects trusted a partner who had behaved cooperatively toward them in the repeated games (i.e., under an incentive structure that encouraged such behavior), even in the final game, in which such an incentive basis was absent. This result indicates that the subjects failed to distinguish the two bases of expecting benign behavior from interaction partners-trust based on the inferred personal traits of the partner and assurance of cooperation based on the nature of the incentive structure.